Informist, Friday, Jan 14, 2022

By Chinmay Mungse

MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange rose today tracking early gains in the benchmark contracts on COMEX as the dollar softened against a basket of major currencies.

* Gold contracts on the COMEX were trading flat today ahead of release of the retail sales figures for December and the provisional consumer sentiment index published by the University of Michigan for January. It was up 0.4% earlier in the day.

* "Both the data have the potential to move the bullion market. Following the US inflation data on Wednesday and the weekly initial jobless claims yesterday (Thursday), market participants will be looking at other economic data in the US," said Commerzbank AG in a report.

* A weaker retail sales and consumer sentiment data would boost the safe-haven appeal of the precious metal thus, supporting gold prices in the international market.

* The US inflation rose 7% for the year through December, the highest in almost 40 years which boosted the demand for the yellow metal as an inflation hedge asset.

* Apart from the US, inflation in Europe was at 5% for the year in December and inflation in UK hit a 10-year high of 5.1% on year in December. "Higher inflation numbers from major economies has risen gold's demand," said Ajay Kedia, research head at Kedia Comtrade.

* However, upside was capped by a lesser than expected US producer price index data released on Thursday. The data showed an increase of 0.2% for December against analyst expectations of a 0.4% increase.

* "The PPI data released yesterday gave investors some respite on the inflation front thus weighing on gold prices," said Manoj Jain, research head at Prithvi Finmart.

* At 1643 IST, the most-active contracts of bullion were:
   --February gold was up 0.3% at 47,892 rupees per 10 gm on MCX
   --February gold was flat at $1,823.2 an ounce on COMEX
   --March silver was up 0.3% at 62,090 rupees per kg on MCX
   –-March silver was flat at $23.15 an ounce on COMEX

* Outlook for the evening session:
   --MCX gold seen at 47,550-48,300 rupees
   --COMEX gold seen at $1,812-$1,837
   --MCX silver seen at 61,680-62,500 rupees
   --COMEX silver seen at $22.87-$23.60

US$1 = 74.15 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Maheswaran Parameswaran

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